This
case arises from the uncertainty inherent in the overlapping
jurisdictional reach of the Utah state courts and the Ute
tribal courts when a dispute arises between the Tribe and a
non-Indian under a series of complex commercial contracts
that create an issue of whether there is an enforceable
waiver of sovereign immunity. The case puts at issue the
interests of three sovereigns: the United States, the state
of Utah, and the Ute Tribe. It is undisputed that Congress,
exercising its power as the sovereign, has and may grant-as
well as limit-the authority of both the state and the Tribe
to exercise their separate jurisdictional authority. And the
boundaries of that authority have and continue to evolve.

Traditionally,
state courts have general subject matter jurisdiction to
resolve disputes that arise within the state's
boundaries. When Congress, as the sovereign, has not waived
immunity or reserved to the federal courts exclusive
jurisdiction in certain areas, the state court's
jurisdiction extends to disputes arising within the
state's geographic boundaries. Similarly, the doctrine of
tribal immunity preempts state court jurisdiction for
disputes arising within tribal boundaries. The scope and
breadth of tribal immunity and preemption have evolved and
continue to evolve, both by congressional action and court
decisions. This case requires the court to determine the
circumstances under which such tribal sovereign immunity
preempting state court jurisdiction may be waived.

Inherent
in the recognition of tribal sovereign immunity is the goal
of supporting tribal self-governance and control over the
Tribe's property, assets, and the management of tribal
affairs. The tribal lands have been held in trust by the
federal government for the benefit of the tribal members. To
avoid misappropriation and abuse, the federal government, as
the guardian for the tribal members, has been required to
approve alienation of trust assets. As valuable resources
have been found on tribal lands, the motivation for
non-Indians to engage in corruption and deceit to deprive
tribal members of the value of these resources has often been
astounding and a sad commentary on the development of the
West's natural resources.[1]

The
natural and appropriate response by the tribes has been to be
increasingly vigilant and zealous in asserting and protecting
their right to control their own affairs. The principal legal
mechanism has been for the tribes to assert their rights to
sovereign immunity, arguing that disputes over trust assets
must be resolved in tribal courts. The tribes, however, have
also recognized the value of participating in the commercial
development of their resources. These commercial transactions
by their very nature are often complex and require
significant capital contribution from non-Indian entities.
These commercial arrangements, as is customary in all similar
complex transactions, require agreements between the parties
on how disputes will be resolved, and by which courts. In
this case, the agreements have ripened the uncertainty about
the overlapping jurisdiction of the state and tribal courts,
and about when and under what circumstances tribal sovereign
immunity comes into play. The very nature of the agreements
themselves requires the parties to determine whether
sovereign immunity has been waived and the jurisdiction of
the state courts recognized.

The
Indian tribes rightly are strongly motivated to enjoy the
fullest protection possible to control the resolution of such
disputes. Similarly, non-Indians are also appropriately
motivated to protect the value of their capital and labor
investments. The motivations and intentions of both sides are
understandable and cannot be faulted. This case requires the
court to resolve how those interests, in compliance with
existing law, statutes, and agreements, should be resolved.

For the
reasons stated below, the court concludes that this contract
dispute should be resolved in Utah state court and the
pending action in the Ute Tribal Court enjoined. The court
reaches this conclusion after reviewing hundreds of pages of
briefing, considering extensive oral argument, and conducting
a careful analysis of a record of more than 5, 000 pages. The
transaction is complex and the parties' attempts to
simplify in order to support their positions have sometimes
missed the essential facts and terms upon which the decision
must be based.

To
address these issues, the court has been required to provide
detail and analysis beyond what would be typical or even
desired on a motion for preliminary injunction. The detailed
analysis has been necessary, however, to fairly and
adequately address the facts and legal issues raised. Because
of the complexity of the agreements, laws, and issues, the
court provided the parties with a draft copy of this
memorandum decision as a tentative ruling and held an
additional hearing on Friday, April 13, 2018, for the parties
to address any errors or misunderstanding in the draft
decision. The final decision incorporates relevant issues
raised by the parties.

PROCEDURAL
BACKGROUND

This
action is before the court on the tribal parties' motion
for a preliminary and/or permanent injunction against Mr.
Lynn Becker and Judge Barry G. Lawrence proceeding in the
matter of Becker v. Ute Indian Tribe et al, No.
140908394, Third Judicial District Court, Salt Lake
County.[2] (ECF No. 54.) A brief history of how this
court came to consider this motion is set forth in the
Memorandum Decision and Order Granting Temporary Restraining
Order dated February 17, 2018.[3] (ECF No. 85.) The motion concerns
the provisions of Article 23 of Becker's Independent
Contractor Agreement and its implications for the
jurisdictional conflict and the issue of tribal exhaustion.
In its entirety, Article 23 states:

If any
Legal Proceeding (definition follows) should arise between
the Parties hereto, the Tribe agrees to a limited waiver of
the defense of sovereign immunity, to the extent such defense
may be available, in order that such legal proceeding be
heard and decided in accordance with the terms of this
Agreement. For purposes of this Agreement, a “Legal
Proceeding” means any judicial, administrative, or
arbitration proceeding conducted pursuant to this Agreement
and relating to the interpretation, breach, or enforcement of
this Agreement. To the extent the course of dealing between
the Parties might be interpreted to have modified or extended
the terms of this Agreement, the limited waiver of sovereign
immunity shall apply to such modification or extension. A
Legal Proceeding shall not include proceedings related to
royalty or similar interests in lands held by the Tribe that
are not expressly subject to the terms of this Agreement.

Each Party hereto consents to service of processing [sic] for
any such Legal Proceeding filed in the court or courts so
designated. The Tribe's limited waiver of sovereign
immunity and submission to jurisdiction also extends to any
arbitration and all review and enforcement of any decision or
award of the panel so convened in the court or courts so
designated. The Tribe's limited waiver of sovereign
immunity shall be further evidenced by a Tribal Resolution
delivered at the time of execution of this Agreement in
accordance with Tribal Laws, that expressly authorizes the
foregoing submission to jurisdiction of the courts so
designated and the execution of this Agreement.

(App'x 98-99, ECF No. 55-1.)

The
Temporary Restraining Order was scheduled to expire on March
3, 2018. Thus, the court held an evidentiary hearing on the
tribal parties' motion on February 28, 2018, during which
no party objected to the court extending the Temporary
Restraining Order enjoining the state court action until the
court could issue its written opinion. (ECF No. 106.) At the
hearing, the court also took evidence and clarified the
purpose for which all evidence would be considered. The court
further stated that in deciding this motion, it should
consider all documents and exhibits on record in this case as
well as in the record of companion case Becker v.
UteIndian Tribe et al, No. 2:16-cv-958, United
States District Court for the Central Division of
Utah.[4] The parties did not object to this
statement. (Feb. 28 Hrg. Tr. 154, 161; ECF No. 111.) The
court therefore DENIES as MOOT the tribal parties'
motions in limine seeking to limit the evidence the court
should consider. (ECF Nos. 97, 98, & 99.)[5] At the hearing,
the court also authorized Mr. Becker to submit additional
authority for the court's consideration, (ECF No. 106),
which he has now done, (ECF No. 109).

On
February 28, 2018, the Ute Indian Tribal Court issued an
opinion (February 28 Opinion) granting the tribal
parties' Motion for Summary Judgment on Grounds of
Illegality Under Federal and Tribal Law. (ECF No. 108-1.) On
March 1, 2018, the day after the hearing in this court on the
tribal parties' motion for preliminary injunction, the
tribal parties filed a notice of the February 28 Opinion.
(ECF No. 108.) The tribal parties subsequently moved this
court to give preclusive effect to the Tribal Court's
February 28 Opinion and to consolidate and advance the
court's consideration and ruling on the questions of
preliminary and permanent injunctive relief as set forth in
the tribal parties' motions for summary judgment and/or
preliminary and permanent injunctive relief. (ECF No. 110.)
Becker has objected to their motion. (ECF No.
115).[6] For the reasons stated below, the court
DENIES the tribal parties' motion to give preclusive
effect to the February 28 Opinion and to consolidate and
advance consideration of their other motions. (ECF No. 110.)
Based on the court's review of the evidence, the
arguments, the briefing, and relevant case law, the court
DENIES the tribal parties' motions for preliminary
injunction. (ECF No. 54 and the injunction portions of ECF
Nos. 52 & 53.)

PRELIMINARY
INJUNCTION STANDARD

Because
this court has previously set forth the factual background in
this matter in its January 31, 2018 Memorandum Decision, (ECF
No. 78), the court begins here with the legal standard it
must follow when ruling on a preliminary injunction. The
court may grant a preliminary injunction, in its sound
discretion, if the movant shows a substantial likelihood of
success on the merits of the relief sought, irreparable harm
to the moving party absent an injunction issuing, that the
damage an injunction will cause to the non-moving party is
outweighed by the threatened injury to the moving party, and
that if issued, an injunction will not be adverse to the
public interest. Kiowa Indian Tribe of Okla. v.
Hoover, 150 F.3d 1163, 1171 (10th Cir. 1995). The court
first addresses the most disputed-and dispositive-element of
the standard in this case: whether the tribal parties have
met their burden to show a substantial likelihood of success
on the merits.

I.
SUBSTANTIAL LIKELIHOOD OF SUCCESS

A.
The State Court Has Subject Matter Jurisdiction.

The
tribal parties first seek to enjoin the Utah state court from
proceeding, arguing that it lacks subject matter jurisdiction
over Becker's contract claims against the tribal parties.
Citing case law from as early as 1832, the tribal parties
argue that it is a fundamental tenet of federal law that
states lack jurisdiction over Indians for conduct occurring
within Indian country.[7]See Worcester v. Georgia, 31 U.S.
515, 561-63 (1832) (concluding that the 1791 treaty of
Holston between the United States and the Cherokee nation
precluded the state of Georgia from criminally adjudicating
non-Indians for actions that occurred on tribal land). While
the tribal parties' initial premise is generally correct,
it is not an unequivocal statement of the law, nor does it
apply without further analysis in this case. See White
Mountain Apache Tribe v. Bracker, 448 U.S. 136, 142
(1980) (“Long ago the Court departed from Mr. Chief
Justice Marshall's view that ‘the laws of [a State]
can have no force' within reservation boundaries”
(alteration in original (quoting Worcester, 31 U.S.
at 561))). Worcester addressed a state criminal
adjudication against non-Indians for actions occurring on
tribal land, and the opinion is “perhaps the most
expansive declaration of Indian independence from state
regulation ever uttered by this Court, pertain[ing] to one of
the original 13 States, unbound by any Enabling Act
whatsoever.” Ariz. v. San CarlosApache
Tribe, 463 U.S. 545, 563 (1983). Because a state's
jurisdiction may be bound by its Enabling Act, the court
begins its analysis of state court subject matter
jurisdiction with Utah's Enabling Act.

In
1894, Utah adopted “[a]n Act to enable the people of
Utah to form a constitution and State government, and to be
admitted into the Union on an equal footing with the original
states.” 28 Stat. 107. Known as the Utah Enabling Act,
it contains a disclaimer of Indian lands and jurisdiction
over those lands as a condition of statehood:

That the people inhabiting said proposed State do agree and
declare that they forever disclaim all right and title to the
unappropriated public lands lying within the boundaries
thereof; and to all lands lying within said limits owned or
held by any Indian or Indian tribes; and that until the title
thereto shall have been extinguished by the United States,
the same shall be and remain subject to the disposition of
the United States, and said Indian lands shall remain
under the absolute jurisdiction and control of the Congress
of the United States . . . .

28 Stat. 107, Sec. 3 (Second) (emphasis added). Article III,
Sec. 2 of the Constitution of Utah repeats this disclaimer
verbatim. The tribal parties argue that the jurisdictional
disclaimer contained in these founding documents means that
the state of Utah has no subject matter jurisdiction over
“Indian lands and Indian people on Indian lands in
Utah” and that only the United States Congress can
grant such jurisdiction. (Pl.'s Reply 11, ECF No.
101.)[8] The tribal parties acknowledge that where
Congress has provided “clear federal authorization,
” (Pl.'s Emerg. Mot. 18, ECF No. 54 (citing
Cohen's Handbook of Federal Indian Law §
7.03(1)(a)(ii), p. 608 (2012 ed.))), and when “Congress
has expressly so provided, ” Cal. v. Cabazon Band
of Indians, 480 U.S. 202, 207 (1987), state courts have
jurisdiction over “actions against Indians arising
within Indian country, ” (Pl.'s Emerg. Mot. 18, ECF
No. 54). Indeed, since Worcester, Congress has
authorized state jurisdiction over a number of types of
actions involving Indian parties on Indian lands, and even
over Indian water rights in state courts. See, e.g.,
SanCarlos Apache Tribe, 463 U.S. at 570
(stating that “we must conclude that the District
Courts were correct in deferring to the state
proceedings”).

Nonetheless,
the tribal parties argue here that Congress has not spoken
and that there is not “a single act of Congress that
empowers the State of Utah to exercise adjudicatory
jurisdiction over the Ute Indian Tribe for actions undertaken
by the Tribe within the exterior boundaries of its
reservation.” (Pl.'s Reply 12, ECF No. 101.)
Without such authorization, they argue, the Tribe's
alleged contractual waiver of sovereign immunity is
ineffective because, even if Becker's Independent
Contractor Agreement is valid, Congress has not authorized
Utah to exercise subject matter jurisdiction over this civil
action. But the tribal parties are incorrect. The Indian
Civil Rights Act of 1968, codified in 25 U.S.C. § 1321
et seq., addresses congressional grants of authority
for states to exercise jurisdiction over criminal and civil
actions involving Indians. Because Becker's action is a
civil action, § 1322 governs. It states:

Consent of the United States; force and effect of civil laws.
The consent of the United States is hereby given to
any State not having jurisdiction over civil causes of
action between Indians or to which Indians are parties which
arise in the areas of Indian country situated within such
State to assume, with the consent of the tribe occupying
the particular Indian country or part thereof which would be
affected by such assumption, such measure of jurisdiction
over any or all such civil causes of action arising within
such Indian country or any part thereof as may be
determined by such State to the same extent that such
State hasjurisdiction over other civil causes of
action, and those civil laws of such State that are of
general application to private persons or private property
shall have the same force and effect within such Indian
country or part thereof as they have elsewhere within that
State.

25 U.S.C. § 1322(a) (emphases added). By its plain
language, section (a) of this statute is express federal
consent and authorization for the Utah state court-which
otherwise has general jurisdiction over civil matters under
Utah Code Ann. § 78A-5-102-to exercise territorial
subject matter jurisdiction over “civil causes of
action between Indians or to which Indians are parties,
” including those “which arise in the areas of
Indian country situated within such State, ” as long as
the state has the “consent of the tribe.” 25
U.S.C. § 1322(a). Then, § 1324 authorized states to
amend their constitutions, Enabling Acts, or existing
statutes to remove legal impediments to the exercise of
congressionally authorized subject matter jurisdiction over
tribal matters.[9] 25 U.S.C. § 1324. Utah did so via
statute. In Utah Code Ann. § 9-9-201, Utah accepted the
jurisdiction, granted by Congress, to preside over civil
matters involving Indians.[10] Thus, pursuant to 25 U.S.C.
§ 1322(a), assuming that the Tribe has consented and the
issue does not involve trust property (both of which will be
discussed infra), Congress has otherwise authorized
the Utah state court to be a court of competent subject
matter jurisdiction over this action.[11]

The
tribal parties argue that Ute Tribe v. Utah, 521
F.Supp. 1072, 1157 (D. Utah 1981) (Ute I),
aff'd in part, rev'd in part on other
grounds, 773 F.3d 1087 (10th Cir. 1985) (Ute
III) (enbanc), “holds that the
State of Utah lacks jurisdiction over the Ute Tribe for
actions undertaken by the Tribe inside the exterior
boundaries of its reservation.” They further argue that
the decision is binding upon Judge Lawrence in state court
under the doctrine of res judicata, upon Becker under the
doctrine of collateral estoppel, and upon this court under
the doctrine of stare decisis. (See Pl.'s Reply
12, ECF No. 101.) The argument overstates the holding of the
case. They more correctly state the holding of these related
cases by quoting Ute Indian Tribe v. Utah, 114 F.3d
1513, 1530 (10th Cir. 1997) (“Ute V”):

the Tribe and the federal government retain
jurisdiction over all trust lands, the National Forest Lands,
the Uncompahgre Reservation, and the three categories of
non-trust lands that remain within the boundaries of the
Uintah Valley Reservation. The state and local defendants
have jurisdiction over the fee lands removed from the
Reservation under the 1902-1905 allotment legislation.

Id. (See Pl.'s Expedited Mot. 29, ECF
No. 52 (emphasis added).) In other words, as to criminal
adjudications in Indian country as defined by 18 U.S.C.
§ 1151, these opinions clarify the geographic boundaries
over which the state of Utah has original criminal
jurisdiction versus the boundaries over which the Tribe
and the federal government retain original criminal
jurisdiction as Congress has divided between them. The Tenth
Circuit has further clarified that 18 U.S.C. § 1151
defines Indian country as to both criminal and civil
jurisdiction. Pittsburg & MidwayCoal Mining
Co. v. Watchman, 52 F.3d 1531, 1540 (10th Cir. 1995).
The tribal parties' argument that these cases mean that
Utah state courts have no civil subject matter jurisdiction
over suits involving tribal parties inside reservation
boundaries fails to acknowledge that the federal government
can-and here has via 25 U.S.C. § 1322(a)-consented to
the state's acceptance of the federal court's civil
jurisdiction over Indian country up to the extent of the
state's general civil jurisdiction, which Utah accepted
in Utah Code Ann. § 9-9-201.[12] Thus, Utah state courts
have underlying subject matter jurisdiction over this matter,
but only, as discussed below, if the Tribe has consented and
if the matter does not involve trust property pursuant to 25
U.S.C. § 1322(b).

1.
The Tribe Is Not Required to Hold a Special Election to
Selectively Consent.

At oral
argument, the tribal parties asserted that the congressional
authorization of state court jurisdiction over civil matters
in 25 U.S.C. § 1322(a) is effective only if the Tribe
consents pursuant to 25 U.S.C. § 1326, which requires a
special election as follows:

State jurisdiction acquired pursuant to this title [25 USCS
§§ 1321 et seq.] with respect to criminal offenses
or civil causes of action, or with respect to both, shall
be applicable in Indian country only where the enrolled
Indians within the affected area of such Indian country
accept such jurisdiction by a majority vote of the adult
Indians voting at a special election held for that
purpose. The Secretary of the Interior shall call such
special election under such rules and regulations as he may
prescribe, when requested to do so by the tribal council or
other governing body, or by 20 per centum of such enrolled
adults.

Id. (emphasis added). The court disagrees that a
tribe's consent by majority vote is required for a
state to accept the federal
government's grant of civil jurisdiction over tribal
matters. Instead, § 1326 relates to a
tribe's ability to independently relinquish to a
state the tribe's jurisdiction over tribal
matters, whether or not the state has accepted the federal
government's jurisdiction. In other words, the court
interprets §§ 1321-1326 et seq. as (1)
requiring a formal election under § 1326 if a tribe
intends to surrender all of its own jurisdiction over tribal
matters to a state that either has or has not yet accepted
the federal government's civil or criminal jurisdiction
or (2) allowing a tribe's waiver of its sovereign
immunity over selected matters if a state has previously
accepted the federal government's jurisdiction by
complying with § 1324.

The Act
of August 15, 1953, is the relevant statute in which five
states (California, Minnesota, Nebraska, Oregon, and
Washington) were given mandatory jurisdiction to the extent
of each state's jurisdiction elsewhere in the state and
in which Congress authorized all remaining states to
“assume jurisdiction over reservation Indians if the
State Legislature or the people vote affirmatively to accept
such responsibility.” Williams v. Lee, 358
U.S. 217, 222 (1959). See Act. of Aug. 15, 1953, c.
505, §§ 2, 4, 6-7; 67 Stat. 590 (hereinafter Public
Law 280, or PL-280). The policy surrounding Public Law 280 in
The Act of 1953 and its amendments in The Indian Civil Rights
Act of 1968 reflect congressional intent to balance-without
itself compelling the states-the federal government's
relinquishment of jurisdiction over tribal matters to states
on the one hand with the ability for Indians, on the other
hand, to exercise independent judgment over when and how much
of their own sovereign immunity to surrender to the states in
whose geographic boundaries they otherwise reside. See
Kennerly v. Dist. Court of Ninth Judicial Dist., 400
U.S. 423, 426-29 (1971). The purpose of this policy was to
facilitate Indians' greater participation in American
society on similar terms as other citizens of the United
States and its component states. See Williams 358
U.S. at 220-21. Additionally, Supreme Court precedent cited
by the tribal parties supports this interpretation.

To
begin with, in Williams, a non-Indian attempted to
sue Indians in Arizona state court for actions that took
place on a reservation. 358 U.S. 217. In 1959, PL-280
provided the only clear federal authorization for states to
exercise civil or criminal jurisdiction over Indians. Consent
by the Indians themselves was not required. In
Williams, the Supreme Court reversed the Arizona
state court judgment against the Indian parties because
Arizona had failed to accept the federal government's
jurisdiction over Indians by 1959, and moreover, its Enabling
Act still expressly disclaimed jurisdiction over Indian
lands. 358 U.S. at 222 n.10, 233.

The
discussion of the procedural election requirements of 25
U.S.C. § 1326 in Kennerly is especially
instructive as to this court's interpretation. 400 U.S.
423 (1971). By 1971, Congress had amended the Act of August
15, 1953, with Title IV of the Civil Rights Act of 1968, 82
Stat. 78, 25 U.S.C. §§ 1321-1326 (1964 ed., Supp.
V). Section 403(b) of the 1968 Act repealed § 7 of the
Act of 1953, which had authorized states to unilaterally
accept the federal government's grant of its jurisdiction
over civil and criminal offenses in Indian country. Section
402(a) of the 1968 Act reaffirmed congressional willingness
to offer that states assume its civil jurisdiction as before,
but this time stated a requirement that such assumption was
subject to “the consent of the tribe . . . which would
be affected by such assumption.” Id. Kennerly
went on to explore the balancing that these provisions
require.

In
Kennerly, Montana had taken no affirmative action to
accept civil or criminal jurisdiction over the Blackfeet
Reservation pursuant to the Act of 1953. 400 U.S. at 425.
Similarly, after the 1968 Act, Montana failed to
legislatively accept civil or criminal jurisdiction over the
Blackfeet tribe by amending its Enabling Act or other
statutes as § 1324 required. Seeid.
at 427. Nevertheless, the Montana state court exercised
jurisdiction over a civil action involving Indians within the
exterior boundaries of the Blackfeet Reservation.
Id. at 424. The basis for Montana's assertion of
civil jurisdiction was that the Blackfeet Tribal Council had
adopted Chapter 2, Civil Action, § 1 as part of the
Blackfeet Tribal Law and Order Code on November 20, 1967,
which stated:

The Tribal Court and the State shall have concurrent and not
exclusive jurisdiction of all suits wherein the defendant is
a member of the Tribe which is brought before the Courts . .
. .

Id. at 425. By 1971, the Court could have considered
evidence of this unilateral tribal action amending the
tribe's Law and Order Code as consent to globally waive
the tribe's sovereign immunity had Montana previously
accepted either Congress' 1953 or 1968 offer of
jurisdiction. See Id. at 428 (examining first
whether Montana had assumed “such measure of
jurisdiction over any or all such civil causes of action
arising within Indian country”). But according to
Kennerly, after the 1968 Act, even if Montana had
accepted jurisdiction under the Act, tribal council
legislation is an insufficient prerequisite to manifest the
tribe's consent to permanently authorize the state to
assume global jurisdiction over a tribe. Id. at
426-30. For that, strict compliance with the election
provisions of 25 U.S.C. § 1326 was
required.[13]Id. at 429.

Dueling
footnotes in Kennerly between the majority and
dissenting justices support this interpretation. The
dissenting justices challenged the majority view because they
believed that the Court's requirement for a special
election in Kennerly required the tribe to
“choose between exclusive tribal court jurisdiction on
the one hand and permanent, irrevocable state jurisdiction on
the other.” Id. at 431 n* (Stewart, J.,
dissenting). The majority expressly stated that this view
“is incorrect.” Id. at 430. Instead, the
majority stated that 25 U.S.C. § 1322(a)
“obviously” does not compel the inference that
Congress intended to foreclose “selective tribal
consent to state exercise of jurisdiction.”
Id. at n.6. Rather, the majority holding is more
specific. It states that before a court can conclude that a
tribe has irrevocably and permanently ceded its tribal
sovereignty and/or consented to share it with a state, the
tribe must comply with the procedural election procedures of
§ 1326. Id. Kennerly says nothing, therefore,
about whether the procedural election requirements of §
1326 are required before the state can accept the
federal government's grant of jurisdiction. In
fact, the state's requirements are set forth in
§ 1324. Kennerly's holding is squarely
focused on the actions a tribe must take to
permanently and globally cede tribal jurisdiction to
the state. It expressly leaves open the option for a tribe to
selectively consent, via selective waivers of tribal
sovereign immunity, to a state's exercise of the
jurisdiction ceded to the state by the federal
government. 400 U.S. at 428 (quoting § 402(a) of
the Act, 25 U.S.C. § 1322(a) (1964 ed., Supp. V), which
grants the United States' consent for states to assume
“such measure of jurisdiction over any or all such
civil causes of action arising within such Indian country or
any part thereof as may be determined by such
State” (emphasis added)).

The
tribal parties' contrary interpretation of the consent
requirement in § 1322(a) relies heavily on “the
idea of inherent Indian sovereignty as a bar to state
jurisdiction.” McLanahan v. Ariz. Tax
Comm'n, 411 U.S. 164, 172 (1973). The trend,
according to the Supreme Court in 1973, had been away from
that idea and toward the treaties and statutes that define
the limits of state power. Id.[14] Thus, in
McClanahan, where Arizona had never accepted civil
jurisdiction over Indians pursuant to § 1324 and the
tribe had not consented to the imposition of state tax on
Indians on the Navajo Reservation, Arizona's state tax
could not be imposed on reservation Indians nor collected or
enforced in Arizona state courts. Id. at
177-78.[15]

The
Supreme Court further clarified the relationship between
subject matter jurisdiction and tribal sovereign immunity in
Kiowa Tribe v. Manufacturing Technologies, Inc. 523
U.S. 751 (1998). Kiowa essentially expanded tribal
sovereignty to include the commercial activities of a tribe
conducted off a reservation. In the process, the Court
continued its trend against analyzing the existence of state
jurisdiction based on inherent Indian sovereignty and instead
“toward reliance on federal pre-emption.”
McLanahan, 411 U.S. at 172. In doing so, the
Kiowa Court stated that “[a]s a matter of
federal law, an Indian tribe is subject to suit only where
Congress has authorized the suit or the tribe has waived its
immunity.” 523 U.S. at 754. This distinction suggests
that “clear federal authorization, ” (Pl.'s
Emergency Mot. 18, ECF No. 54, citing Cohen's Handbook of
Federal Indian Law § 7.03(1)(a)(ii), p. 608 (2012 ed.)),
is one side of a coin by which subject matter jurisdiction is
transferred from the federal government to a state that
accepts it. And tribal waiver of sovereign immunity-either
globally pursuant to special election via 25 U.S.C. §
1326 or selectively as suggested by Kennerly-is the
other side of the same coin. Both are necessary. This view is
consistent with the Tenth Circuit's statement in
Lawrence that the two concepts are “different
animals.” 875 F.3d at 545. In Kiowa, the state
of Oklahoma, which is not a PL-280 mandatory jurisdiction
state, did not have subject matter jurisdiction over a
contract case both because it has not acted to accept civil
or criminal jurisdiction under § 1324, see,
e.g., Muscogee (Creek) Nation v. Hodel, 851
F.2d 1439 (U.S. App. D.C. 1988); Indian Country, U.S.A.
v. Okla., 829 F.2d 967 (10th Cir. 1987), and because the
tribe had not waived its immunity. Kiowa, 523 U.S.
at 760.

The
Supreme Court confirmed the interpretation that a special
election is not required for a tribe to selectively consent
to waive sovereign immunity in C & L Enterprises v.
Citizen Band Potawatomi Indian Tribe of Oklahoma, 532
U.S. 411 (2001). The case arose in Oklahoma, which has never
accepted general civil jurisdiction over Indians pursuant to
§ 1324. The Supreme Court held that a sufficiently clear
contractual waiver of tribal immunity, combined with a state
statute accepting jurisdiction over contracts involving
arbitration, was sufficient for a state court to exercise
civil jurisdiction over an Indian tribe for off-reservation
commercial activity.[16]Id. at 418-19. C &
L thus means that not only can tribes selectively
consent to state jurisdiction as Kennerly suggested,
but also that states can selectively assent to accept the
federal government's subject matter jurisdiction over
tribal matters under § 1324 by enacting statutes that do
not disclaim jurisdiction over tribes or tribal parties on
that subject. Id. at 419-20 (finding that Okla.
Stat., Tit. 15, § 802.B (1993) regarding arbitration
agreements vests jurisdiction over such agreements-regardless
of the parties-in “any court of competent jurisdiction
of this state, ” including the Oklahoma state
court).[17]

Based
on this analysis, the court concludes that a special election
under 25 U.S.C. § 1326 is not required for the Tribe to
selectively consent to suit in a state court where-as in
Utah-the state has undisputedly accepted the federal
court's jurisdictional authority pursuant to §
1324.[18] Rather, the court concludes that because
Utah has unequivocally accepted federal authorization to
exercise civil jurisdiction, the tribal parties'
likelihood of success on the merits of the state court's
jurisdiction under § 1322(a) does not rest on the Tribe
never having requested or held a § 1326 special
election, but depends solely on whether there is a valid
selective waiver of the Tribe's sovereign immunity in the
Becker Independent Contractor Agreement, which will be
comprehensively analyzed infra.

This
conclusion is also supported by a comparison with
jurisdictional and immunity issues in Blatchford v.
Native Village of Noahtak, 501 U.S. 775 (1991), which
held that the congressional grant of original jurisdiction
over civil actions brought by Indian tribes arising under the
United States Constitution, laws, or treaties pursuant to 28
U.S.C. § 1362 is not a waiver of a state's Eleventh
Amendment immunity defense, id. at 786 n.4. In other
words, the congressional grant of jurisdiction in 28 U.S.C.
§ 1362 is “wholly distinct” from immunity
defenses. Id. By analogy to Blatchford, the
congressional grant of civil jurisdiction under 25 U.S.C.
§ 1322(a)-that can be accepted by a state pursuant to 25
U.S.C. § 1324-is a “wholly distinct” issue
from whether a tribe has (1) globally waived its sovereign
immunity by special election consent under 25 U.S.C. §
1326 or (2) selectively waived its sovereign immunity as in
Kennerly and C & L. Existence of
subject matter jurisdictional authority is not negated by the
existence of immunity; immunity simply limits the exercise of
any authorized jurisdiction. Id. at 779.

Also
supporting this reasoning is the Tenth Circuit's
discussion of the United States' waiver of sovereign
immunity in The Indian Reorganization Act in Wopsock v.
Natchees, 279 Fed.Appx. 679 (10th Cir.
2008).[19] In Wopsock, former Ute Business
Committee members attempted to sue federal Bureau of Indian
Affairs officials for allegedly failing to call a special
election to approve two ordinances that amended the
Tribe's Constitution. Id. at 686. By enacting
The Indian Reorganization Act, Congress established the
federal court's subject matter jurisdiction; in addition,
the Act contains a congressionally approved waiver of the
United States' sovereign immunity for violations of the
Act. Id. When discussing whether the court had
jurisdiction over the Bureau of Indian Affairs defendants,
the Tenth Circuit referred interchangeably to the United
States' “consent” to suit and the United
States' “waiver of sovereign immunity” and
specifically stated that “[i]t is the terms of the
United States' consent that define this court's
jurisdiction to entertain any suit.” Id. at
685-86. Notably, there was no question that Congress'
enactment of The Indian Reorganization Act conferred subject
matter jurisdiction on the court. The only question was
whether the officials had violated the terms of the Act
sufficiently for the Act to trigger the United States'
consent, or waiver of its sovereign immunity, and subjected
it to suit for redress of those alleged violations.
Id. at 685-87; see also Alvarado v. Table Mt.
Rancheria, 509 F.3d 1008, 1016 (9th Cir. 2007)
(“To confer subject matter jurisdiction in an action
against a sovereign, in addition to a waiver of sovereign
immunity, there must be statutory authority vesting a
district court with subject matter jurisdiction.”);
Quality Tooling v. United States, 47 F.3d 1569, 1575
(Fed. Cir. 1995) (“The inquiry, then, is not whether
there is the one, jurisdiction, or the other, a waiver of
immunity, but whether there is both.”). Likewise, here
there is no question that Congress authorized states to
accept civil jurisdiction over Indian matters in §
1322(a), which Utah accepted pursuant to § 1324 by
enacting Utah Code Ann. § 9-9-201. The only way, then,
that the Tribe's consent impacts the state's
jurisdictional authority to entertain a suit is if the Tribe
has also waived its sovereign immunity. It is undisputed that
the Tribe has not requested a special election pursuant to 25
U.S.C. § 1326 to cede all of its sovereign immunity to
Utah, but whether the terms of the Becker Independent
Contractor Agreement-if the agreement is valid-triggered the
Tribe's selective waiver of its sovereign immunity to
consent to suit on the agreement is a substantial
question.[20]

The
court has concluded that the Utah state court has subject
matter jurisdiction because Congress authorized Utah to
exercise civil jurisdiction over Indian matters in 25 U.S.C.
§ 1322(a) and because Utah accepted that jurisdiction in
Utah Code Ann. § 9-9-201. The next question before the
court is whether this action seeks to adjudicate “the
ownership or right to possession . . . or any interest
therein” of “any real or personal property . . .
belonging to any Indian or any Indian tribe . . . that is
held in trust by the United States.” 25 U.S.C. §
1322(b);[21] 28 U.S.C. § 1360(b).[22] Both statutes
provide that Congress has not conferred on states its subject
matter jurisdiction over trust property. Therefore, if the
action involves trust property, Utah would be precluded from
having subject matter jurisdiction over this action,
regardless of its acceptance of § 1322(a) via §
1324 and Utah Code Ann. § 9-9-201.

At this
point, because answers to the questions regarding trust
property and selective waiver of the tribe's sovereign
immunity dictate the tribal parties' likelihood of
success on the merits of their argument that the state court
has no jurisdiction over this action, the court must consider
in full the validity and terms of the Becker Independent
Contractor Agreement at issue. Before doing so, however, the
court addresses the tribal parties' motion that the
Tribal Court's February 28 Opinion should be given
preclusive effect. (ECF No. 110.) This is because the Tribal
Court's ruling directly addresses the validity of the
contract under federal and tribal law, and if preclusive
would dictate the court's evaluation of the tribal
parties' likelihood of success on the merits.

B.
February 28, 2018 Tribal Court Decision

1.
Background

On
August 18, 2016, the Ute Indian Tribe, the Uintah and Ouray
Tribal Business Committee, and Ute Energy Holdings, LLC,
filed a declaratory judgment action against Becker in The Ute
Indian Tribal Court of the Uintah and Ouray Reservation. The
tribal parties first filed their complaint in Tribal Court
three and a half years after Becker initiated federal court
action on this contract, (Becker v. Ute Indian Tribe of
the Uintah and Ouray Reservation et al, No. 2:13-cv-123
(dismissed for lack of federal question jurisdiction)),
twenty months after Becker sued in state court, and two days
after this court, Judge Robert J. Shelby presiding, dismissed
the instant action for lack of federal court jurisdiction,
(ECF No. 40). Becker's companion case seeking to enjoin
the tribal parties from pursuing the 2016 Tribal Court action
is No. 2:16-cv-958 in this court. (Compl. for Decl. J., ECF
No. 2-3, No. 2:16-cv-958.) The Tribal Court issued its
February 28 Opinion as a result of the following
circumstances.

On
September 14, 2016, this court initially granted Becker's
motion for a temporary restraining order enjoining the
parties from pursuing the Tribal Court action, and followed
that order with a preliminary injunction on September 28,
2016. (ECF No. 50, No. 2:16-cv-958.) The tribal parties had
previously filed a motion for summary judgment in Tribal
Court on September 12, 2016, two days before this court's
temporary restraining order, seeking a ruling that
Becker's contract was void as an ultra vires act under
tribal law. (App'x 178, ECF No. 122-1, No. 2:16-cv-958.)
Becker had filed a motion to dismiss the Tribal Court action
on September 14, 2016, on the grounds that the contract
validly waived the Tribe's sovereign immunity and
exhaustion remedies and that the Tribe had submitted to
jurisdiction elsewhere. (App'x 206, ECF No. 122-1, No.
2:16-cv-958.) The tribal parties immediately appealed this
court's preliminary injunction, and on December 30, 2016,
the Tenth Circuit stayed the preliminary injunction to allow
the parties to pursue the Tribal Court action during the
appeal.

After
the injunction was stayed, the parties continued litigating
in Tribal Court, completing their briefing on the above two
motions. On March 9, 2017, the Tribal Court, Judge Pro Tem
Thomas Weathers presiding, denied Becker's first motion
to dismiss and denied without prejudice the tribal
parties' motion for summary judgment.[24] (App'x 4,
ECF No. 122-3, No. 2:16-cv-958.) Judge Weathers also ordered
the parties to show cause why the Tribal Court “should
not dismiss or at least stay this lawsuit pending resolution
of the state and federal lawsuits as a matter of comity,
preservation of limited judicial resources, and avoidance of
conflicting judgments.” (Id. at 7.) Following
briefing on the order to show cause, the Tribal Court issued
an Order on June 9, 2017, declining to stay or dismiss the
case primarily so that it could rule on the tribal law
questions. (Id. at 257-58.) Judge Weathers
bifurcated the tribal parties' complaint and scheduled
discovery to proceed only on issues related to the validity
of the contract and its terms under tribal and federal law,
including the waiver of sovereign immunity and the need for
federal approval of the contract. (ECF No. 70-12, No.
2:16-cv-958.)

On
August 25, 2017, during the discovery period on these issues,
the Tenth Circuit reversed this court's preliminary
injunction, holding that because Becker had not shown a
likelihood of success on the validity of the contract waiving
tribal exhaustion, the Tribal Court should address in ...

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